Is Microsoft Dead?

Paul Graham, founder of Y-Combinator, declares Microsoft is dead (also translated to Hebrew at Ynet)
While this is certainly an eye-catching, buzz-creating headline, but it seems there isn’t much behind it.

Paul notes four reasons why he believes Microsoft is “dead”:

  • Google is the most dangerous and feared company nowadays
  • AJAX and JavaScript is the new programming model of choice
  • Broadband Internet connections make the desktop irrelevant
  • Apple “Their victory is so complete I am now surprised when I see a Windows PC”
  • Startups no longer fear Microsoft.

Holding up Apple and Google as the Microsoft killers is an interesting notion but far from reality.

Apple is a hardware (and retailing) company and has roughly about 6% of the computers market. Yet, Paul marks Apple as a clear leader in the computers industry with its OS X operating system – “Their victory is so complete that I’m now surprised when I come across a computer running Windows.”
He also mentions that “Nearly all the people we fund at YC use Apple laptops”. I have to say that I know only few people who use Apple, I haven’t seen many Apple machines when I traveled in the US and the penetration rate here at Israel is low to non-existing. Furthermore, the people I do know who use are using Apple, usually boot it with Windows.
Paul’s statements on this matter are simply far fetched and outrageous…

Google is an advertising company. One can say that it does consumer web search and a bunch of other things but basically its business is based advertising through the different channels it owns.
Google has about 45% of the search market which is its primary channel.

Both companies are doing really well in their respective domains, but are they Microsoft killers? I don’t think so.

Microsoft competes in desktop operating systems, server operating systems, databases, and development tools. Microsoft also competes in home entertainment with its multi-billion dollars XBox gaming console and its Media Center software. It also has nearly a billion dollar business in Windows Mobile for mobile devices (SmartPhones, Pocket PCs etc.) which is currently the most widespread Os for such devices.
Microsoft is also in the search business with it’s Live! Search which has about 10% of the search market. If Apple can make money and be considered as a leader with its 6% than I’m certain that Microsoft can do well with these 10%.
So, which one of these areas is currently being killed by Google and Apple? None.

Another argument from Paul’s post states the fact that startup companies no longer fear Microsoft. Why should Microsoft scare startups? Is Google scaring any startups?
I think its of the interest for big companies like MicrosoftGoogleetc. to encourage startups as part of their ecosystem rather than scare them away.
Encouraging startups and building a large dynamic ecosystem increases their business value, and it also makes it easier to buy and integrate one of these startups if it shows potential.
I don’t think there’s a company out there with a larger amount of partners and a better ecosystem than Microsoft’s (In fact, recent posts show that Google is struggling in this area)

In his second post on the topic, besides deeming SAP and IBM as dead too (what about Oracle?) it becomes very clear that Paul’s meaning for “Dead” is boring and profitable. Companies that are “Dead” are not doing any cutting edge research and release new disruptive software using new business models.

Yet, Microsoft’s Surface and Silverlight are good examples for just that…

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